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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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480

TOPIC FREQUENCY

Us 9, S&p 5, United States 4, Apple 3, Ralph Acampora 3, U.s. 3, Europe 3, China 3, Greenberg 3, Siemens 2, At&t 2, Ken 2, Bob 2, Scott 2, Verizon 2, America 2, Abigail 2, Peter Schiff 2, Romney 2, Ben Bernanke 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    February 1, 2013
    3:00 - 4:00pm EST  

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big day. gigantic day on monday. we all picked stocks. a bunch of people picked them, mandy and i and herb. way pack in april going to the super bowl. the winner will be crowned on -- it's going to be bigger than the super bowl. >> huge big. thanks for watching "street signs." have a great weekend, everybody. good luck on sunday. cnbc's coverage. dow 14,000 continues right now. and we enter the final stretch. happy friday, everybody. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. the dow has crossed the dow 14,000 mark. will we close there? >> that's the big question, maria, on this friday. i'm scott wapner. bill will be back on monday, but he's missing all of this fun
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today. maria, that is the question, where do we close? the dow teetering back and forth all day long and, of course, now we're also within striking distance of the all-time high. get your pens ready. 14,164. we're not that far away. >> it's amazing that we're not that far. special coverage is lined up for the next hour. we'll take you through the close and beyond. top money managers, more predictions about where we go from here and how to put your money to work right now. let's check the markets as we approach the final stretch. the dow jones industrial average sitting near the highs of the day with a gain on the session of 140 points, about 1%, and now at 13,998, having just moved past and below that 14,000 mark. nasdaq also higher today. 36 points higher, better than 1% at 3177 and the s&p 500, also showing a double-digit move, almost 1% on the standard & poor's. >> the next big milestone after 14k is the all-time high, and
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that is very reachable next week if stocks don't do an about-face. let's get right to it with today's "closing bell" exchange. tom, are you a believer? are you a believer in 14,000? >> i -- you know, it's funny. i know that we love to talk about these things on television. at the end of the day -- >> that's why we're other. >> what's the difference? i don't think it's necessarily a reflection of an economy that's also gaining momentum. i think that the economy is more moving sideways at this point than anything. there are other underlying reasons for the equity market to perform as well as it has and part that have is, of course, central bank policy, but, you know, i know it makes for a neat little discussion, but ultimately i'm more concerned about the economics of this, and the economics of this is we're moving sideways, not gaining much momentum at this point. >> that's what we're seeing, a choppy situation when it comes to the actual fundamentals and
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it's really about the federal reserve and why so much money is moving into the market. the question is do you think it's sustainable, given the fact that so far fundamentals have not mattered. what does 2013 lock like? >> i heard some equity strategists say s&p 1,700, an while fundamentally i'd love to toss that person out the window, practically speaking i think why not? why can't you get there, because at the end of the day, we're not being driven by fundamentals. i think policy is conducive for the equity market and indeed other distortions to be embedded in other markets. >> peter schiff, if this market is going to take the next leg higher, money has to come from somewhere. you've said in the past you think there's a tremendous bond bubble building. when does it burst, and is that the form of the big money now that comes into the stocks to take it higher? >> yeah. well, first of all, you know, it's only sustainable this, 14,000 because it is an illusion. it's not real. we're measuring the dow with inflated paper dollars.
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when the dow hit 14,000 back in 2007, gold was $700 an ounce, so measured in terms of real money, the dow would have to double to get back to where it was in '07, but as far as the bond bubble, it is going to burst. maybe it's already burst, i don't know. there's a lot of air that has to come out, but imagine what's going to happen to the bond market when all the money that's parked in bonds tries to exit for something real because people wake up to the inflationary threats that are out there. you know, you don't have the eurozone crisis anymore. the euro is making new 52-week highs against the dollar, as are many other currencies, so there's a lot of money left to come out and what if the fed, i think it's all bluff, but what if the fed tried to shrink its balance she had and it tried to sell bonds, the public tries to sell bonds. the government is trying to sell over 1 thrill terillion in treasuries every year on its own, so eventually when the bottom drops out of the bond market, it's a huge problem. i think in the short run the fed is going to print a lot of money to prevent that from happening
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so stocks can keep trending higher, just like the price of everything else. stocks will not go up as fast as the price of gasoline and food and a lot of other things that rise when you debase your currenty. >> so what do you think? do you think it continues? do you think 2013 means more money into stocks given the fact that it's the fed really driving everything? >> money is losing value. that's what's happening, and people that recognize that are getting rid of their dollars, and they are buying other things. makes a lot more sense to own stocks than treasuries or corporate bonds, for that matter, or any dead instrument denominated in dollars, but i think smarter investors are going to look abroad. look what's gone on in some of these emerging markets. look at the asian markets and lock at precious metals. i think you've got a lull before the storm here in gold. a lot of wall street traders are writing gold off, saying the rally is over because there's nothing to worry about, the crisis is over. that's not why gold was going up. gold was never rising because of a crisis. it was rising because of
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money-printing, inflation, cheap money. if you look at what was going on with gold from 2000 to 2008, gold was doing a lot better before the crisis than it did during the crisis, and the way they papered over the crisis -- >> maria, can i -- >> by printing money by destroying currency and gold is going up and so are stocks. >> i have to disagree with the armageddon forecast here. i mean, first of all, milestones do matter and big round numbers play really well on main street. when you go to a bakery or barber shop this weekend or in between the super bowl game, people are going to say, gee, did you see the money and that gets individual investors re-engaged in the market and that's entirely rational behavior. let's call it what it is, a momentum-driven market, driven by fund flows and not necessarily armageddon. you've got a worldwide currency issue and a lot of scary stuff in the world. >> i think more people will be talking about rising gas prices than rising stock prices. >> they have been talking about
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rising gas prices and there's no question they are concerned. they are more worried about higher chicken wing prices for the super bowl. that's what they are worried about. that conversation is going to shift back to the stock market because people want to make money. 13 years, the market's done nothing. the bubble is gone. we've deflated the equity bubble. >> they will lose a lot less in stocks than they will in cash or treasuries, that's for sure. when you have inflation -- >> if you re-engage the retail investor. >> don't mistake this for growth. the u.s. economy is in a lot of trouble and the rising stock market doesn't reflect improving fundamentals, reflects inflation and a debased currenty. >> never been on the end of the world because it only happens once. you hear that repeatedly. >> why do you keep saying the end of the world? >> who is talking the end of the world? >> rick santelli, can you get in here? i mean, peter schiff and you -- >> i think everybody is a little bit right. everybody is a little bit right. all the major central banks and the old developed economies, even some of the just recently developed economies, well, they
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have central banks that have put a boundary around rational investors. as much many like gold, they want diversionification, where are you going to go? the treasuries are safe if you're really rich, looking to accumulate wealth and peter is right, but it's still a mug's game no matter how you slice it. i agree with the guest who said the economy is sideways on fundamentals so all roads lead to stocks so whether you can come up a quantitative argument or not, i would be crazy to challenge the direction of stocks. as far as interest rates, they are not fully buying into this. they are going to creep up a bit, but the bubble, and everybody is right about, probably isn't going to burst for years and the fed isn't going to voluntarily stop in my opinion so you don't have to worry about the stock trade here and now. >> tom, i'm the first person to say this rally is 100% due to the federal reserve and the free money and the fact that there are very few alternatives, but let's not forget. we got a jobs number out today that was better than expected or
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at least it was in line with expectations and a housing market that has clearly turned the corner, and we have a corporate sector that is flush with cash, $3.6 trillion so, while, yes, i agree the economy is not showing any great shakes we are seeing pockets of this story actually show real vibrancy. >> this is a long conversation. i'll try to keep it really short. i think all the things that you've just described fit very snugly into an economy that's moving along at a 2% rate. >> which is what we are. >> which is exactly where we are. again, there's no momentum being generated, and at the end of the day if you're stagnant, that has to work into your fundamentals, so the job report is a great example. >> you've got to buy the government's inflation numbers if you think the economy is actually expanding. by the way, 85 billion a month in qe won't be enough to stop the bond bubble from bursting. >> there is a little bit of momentum though. >> you can't blame it all on --
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>> there is real momentum. >> peter, listen one second. maria is right. i mean, there is real momentum, whether -- whether it is with housing or manufacturing. >> corporate cash. >> whether with construction or consumer spending, business investment. all of these little pockets have to mean something. >> but, again, define for me momentum. >> zero gdp in the fourth quarter. >> housing was a detractor from growth up until this year, the first year that hasn't contributed to growth. contributed 0.2% to growth. housing this year will be contribute to growth, 0.3%, 0.4, going from 0.2 to 0.4 momentum, absolutely? but what's the degree of momentum we're dealing with. >> where is it coming from? it's cheap money? what do you expect. >> maria, i would argue here -- >> we don't have the momentum that we should be having. >> absolutely. >> don't have the kind of job growth and kind of economic growth that one would expect at this point in the recovery.
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that's absolutely a fact. >> we won't get the job growth as long as government is spending and regulating, the economy won't grow. we'll print money and debase our currency. stocks will go up, but it's not a good thing. >> peter, check your ideology at the door in this environment and recognize -- whether we like it or not, this is the world we live in. we've got to navigate it. no one asked me if i like the fed policy. >> right, right. >> let's make that the last word, too. >> it is what it is. >> well, you're living in the world, you should understand it. you might like it. you've got to understand it. >> i don't disagree with that. >> great conversation. appreciate it. >> how is that for a wake you up? >> we are awake. look at these markets, everybody. 14,000 on the dow jones industrial average. up 143 points. 45 minutes left to the day and for the trading week. >> and coming up, the market blowing right by a less than stallary jobs report and an ugly gdp report. is it because those reports
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support the fed forever plan? think we were just having a little bit of that conversation. >> fed forever. and not everybody is a believer in this rally. got some big bears out there, and they are growling about a major selloff on the horizon. stay tuned for our wall street group of rally questioners? rally hateers? >> yeah, they are haters out there. >> okay. >> after the bell pimco's bill gross will tell us why investors should be very afraid of these markets. all stations come over to mission a for a final go. this is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers.
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welcome back. markets are up today cheering past the tepid jobs report where the unemployment rate ticked higher to 7.9%. instead investors focusing on revisions to the prior months that added more than 100,000 jobs. the revisions were better than last month. >> very strong, and with the so-so jobs number and negative gdp report we got earlier in the week is the market betting on a fed forever scenario with ben bernanke keeping the easy money coming? >> let's talk about that with our guests. gentlemen, good to see you. thanks for joining us. >> thanks for having me on. >> ken, what do you think?
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do you think the federal reserve will be printing money for as long as you can look out? >> yeah. it looks like they are going to keep an easy policy for a long time because they have said they want to see unemployment get below 6.5%. i mean, that's the rough trigger, and we don't look like we're going to get this any time soon with this kind of jobs growth. it's stable but just only chipping away at the unemployment rate. >> there are people out there, you know, sir, who look at that and say, you know what, the rally section conclusively due to the actions of the fed, give little credit to what's happening -- >> yeah. >> no, i don't agree with that at all. i think there's definitely more stability. people were afraid europe was going to fall apart, the fiscal cliff, the chinese transition, and things are more stable. they are not exciting, so if you're hiding your money under a mass mah tress and a lot of people were, gee, maybe i ought to invest in something and that's what's going on.
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>> is there a downside risk here? dean, you say investors are happy because the numbers could have been worse, but when you look at what's going on with the federal reserve and there's very few alternatives to stocks, is there a downside risk to this fed action? >> it's very hard for me to see what it is. orderly what you would say we have to worry about inflation. very, very hard to see it. i mean, every indicator we have shows that inflation is stable or trending downward. we're looking at very modest growth for the foreseeable future and it's hard to see where we get into a situation where where might see inflation picking up any time soon. even with the revisions, and they were positive, we're looking at 200,000 growth per month over the last three months. i think some that have was even inflated. that's not that strong a figure given where we are, down 9 million jobs. no that strong a figure and part of that was inflatable by sandy, construction jobs, and unusually good weather. saw the same thing last year.
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unusually good weather in the winter months and a very weak spring, and i think we may see that again this year. >> i think that there are risks. i think there are risks to the policy, but they are down the road. it's an experimental policy. it's consensus policy, among a lot of economists, including me, but it's, you know, experimental. it hasn't been tried, and when they have to exit, we don't quite know how smoothly that's going to go. >> can i ask you professor. this sounds interesting to me, okay. you were romney's economic adviser or one of them and work with the mccain campaign. >> no, actually i wasn't. i wasn't working with romney. i was with the mccain campaign. >> but it sounds to me, however, that you don't have much of a problem at all with what ben bernanke and company have done. >> no, not at mull. i mean, we're in a once in 75 year, once in 100 year downturn here. in many ways we're not out of
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the 2007 downturn that started then and you're taking risks any direction you go, and we're in a risk that we could have slow growth for two more decades, at least, you know, subpar growth so there's no easy move here. inflation is a risk, but i think, as dean said, we're a long ways off from where that's the paramount problem. >> what kind of a 2013 are you guys looking for in terms of the economy? what would be your best expectation for this year ahead? ken? >> i would say we're likely under 2% growth. would i have said had we not had any contractionary moves, the ending of the payroll tax cut and also the sequester, whatever cut we see coming out of there, i would have said probably close to 3% because of the kick up in the housing market. clearly there's a rebound there that's very, very good news. when you factor in the drag we'll get at the end of the tax cut and we don't know exactly what we'll see in sequester-related cuts, that will approximate some off gdp
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growth, so maybe 2 or upped. not a good story. >> it's a question of balance. >> if that's the case, and would i like to know whether you agree with that, ken, the question is this market priced for perfection, and are we poised for a decline given the fact that the economy won't keep up with expectations? >> i think the risks are balanced. weak growth, moderate growth, and i agree 2%, though maybe towards the end of the year it will be looking better, but, you know, i don't think we're like really likely to swing in recession neglecting the q4 gdp number. growth could turn out to be better. i think it's balanced risk, moderate growth but the risks are moderate, too, and i think the rise in all-risk assets is understandable. everybody had their money hidden and you mattress and it's just pouring out, and, you know, i think it's reernl. i don't think we'll see huge moves from here necessarily. >> all right. we'll leave it there. gentlemen, thank you so much. >> appreciate your time tonight.
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see you soon. 40 minutes before the closing bell sounds for the day, for the week, a market sitting right at 14,000. of course, this is going to be the highest close, if we close above 14,000, since 2007, and we've still got only 130 points away from the all-time high? >> what's so impressive, it's done this last leg without apple, right? >> apple is the worst performer in the s&p 500 this year. well, netflix is the best. you heard that right. apple the worst and netflix the best, but will that hold for the rest of the year? that trade is next. also ahead, the dow may be at 14,000, but herb greenberg says investors beware. he's laying out the possible traps that are hidden in this market. stay with us for that.
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rock 'n' roll. take a look at these markets. 14,000, the last trade on the dow jones industrial average with a gain of 104 points. the index on close to close above 14,000 for the first time october 17th, 2007. just want to point out that some of the leadership is really coming from the banks and telecom. bank of america, verizon, at&t, all among the winners. three standouts on the downside, merck down 3%, exxon mobil and hewlett-packard the throw laggards unable to go positive, even in a bull market. scott? >> maria, thank you. the s&p hitting its highest levels since 2007. best performer of the year, believe it or not, netflix, up almost 80%. the worst, i know it's
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surprising but it's apple. down some 14% over the same period. this is almost the opposite of what happened last year so which is the better buy going forward? let's talk some numbers. on the technical is abigail doolittle and on the fundamentals zach karabell, president of river twice research. abigail, beginning with you, which stock do you prefer looking at the charts, apple or netflix? >> netflix is the bullish chart of these two and reasons why apple is the worst performing stock of 2013. the very simple fact, charts never lie. this stock started to break down in the last half of 2012. it did so when it reversed its five-year uptrend. at that time it became a chart, not of the bullish accumulation of the last five years but shifted towards bearish distribution and did it on a double top when the sellers really took control a couple weeks ago. that pattern of distribution carries 253, continued decline
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and sellers are in charge and netflix, on the other hand, is really the inverse of apple's chart. it shows us that the buyers are in charge of netflix' five-year uptrend. it recently put in a rounding bottom. that pattern continues to get larger as buyers become more and more enthusiastic about netflix's prospects ahead. the official target is 212, but if you look at the channel, this thing could go up to 400. i'm not saying that's going to happen. >> i got you. >> apple is bearish, and netflix is certainly bullish from a technical standpoint. >> you did say the charts never lie. are we to a point that we actually believe that the fundamentals on netflix are better than apple because if you said that not six months ago people would have taken you to the doctor? >> charts never lie but they often confuse and obfuscate. i'm sure we'll all binge on 13 hours of "house of lies" this weekend. how many times did you look at netflix and are thankful for not
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being in and occasionally distressed that you're not part of the ride up, but talk about a trading vehicle that follows the most essential market momentum. you feel you have a key on that, more power to you, but no way to see how this maintains that momentum even if it goes higher for a while. as for ale, a lot of the bull pac was deserved but you're left with the business that so many people said was trading and a discount to competitors for a business model not evidently slowing. whether apple survives over the next five years we'll find out and -- >> what do you mean if apple survives over the next five years? where is it going? >> would have said the same thing about rim five, six years ago. >> come on. i am going to take you to the doctor because that's the most ridiculous thing i've heard. are we really putting those two in the same category? >> what's really important to take note of here around apple and fefltics, we've had an
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inflexion point. the technical inflict point was months ago when apple started to reverse up. the fundamental inflexion point was a couple weeks ago in the last quarterly reports again proving that charts lead, charts never lie. the technicals rule here. the technicals are bullish on netflix and bearish on apple, and the sellers are in charge on apple and simply the buyers are overwhelming the sellers in that chart of netflix. >> i would much rather be in apple. my point, is scott, things can change over the next five or ten years like they have norfolkia in ways that are not known. the core of apple's business is quite strong as the stock has been atrocious. >> something to keep in mind about apple though, it's one of the most widely held names among the plain vanilla institutional money. it will take weeks for the earnings revisions and number revisions to go through the models. the models will produce dues continued sell calls on apple. it will take weeks, maybe months
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for that to flush out and that's not looking ahead to what the fundamentals will be so i think the selllers continue to take control here. >> guys, thanks so much. abigail, we'll see you soon. zach, we'll see you soon as well. >> okay. all right. take a look at the market. just below 14,000 is where the dow currently sits. 13,998. >> is there anything stopping this rally? ralph acampora expects the markets to take a breather, but then what happens next? >> plus, banks are still nowhere near their pre-financial crisis highs. will they leave the market on a new leg higher? tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime. tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade.
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welcome back. getting closer to the end of the trading day. looking like a good day regardless. will we close above 14,000? that's the key question. >> with us right now is ralph acampora. ralph, i'm not going to ask you -- great to have you. i'm not going to ask you whether we'll close above or below it today, almost irrelevant. where are we going from here? that's what really matters to people watching. >> well, we've, as you all know, we've had a great january, so i -- i love the leadership.
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i've been very, very positive on the market all along and i think any kind of a hesitation or pause, if you're a long-term investor, is definitely a buying opportunity, especially with the financial leadership. it's very, very encouraging. >> i'm having a little deja vu moment over here, ralph. first of all, i think this is a little moment of pause we should take and give ralph acampora some kudos here, okay? because in the middle of the downdraft and the selling, ralph has been bullish and sticking to it, you're right, ralph, thanks for making our viewers smarter on this. i want to ask you about this. the deja vu that i'm talking about? when the market crossed 10,000, you got a little red corvette with 10,000 on the license plate? >> 1997. my first target was 7000 and everybody thought i was crazy. that's when i got the corvette and then i raised it to ten. you and i took a ride in that car. >> that was fun. >> here we are at 14,000.
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you were right and like the leadership. this leadership, banks, economically sensitive, not so much technology, what do you think is going to be the leadership this year? >> well, it ended last year with the financials coming on strong. maria, i think that's just the beginning of -- of the -- of the move in financials, and i think -- i think technology will play a game of catchup. it's quality. quality leadership, and that's so very, very important. i know people on a short-term basis are concerned, and i -- i can understand that, but there's absolutely, absolutely no speculation, and that's what ends the bull market is speculation. we're not even there. the public's not in the market, so there's a lot of room left. >> hey, bob, bob pisani with us as well. bob, you heard that. there is, you know, evidence that money is starting to come into the market. >> yeah. >> ral is absolutely right. the public is really only
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dipping their toe in, so we've seen several billion of inflows in mutual funds in the month of january. four consecutive weeks, scott, good news. $400 billion in outflows from mutual funds since 2008 so compare it. maybe we've got 40 billion going in in the last, you know, month or so, but $400 billion came out in the last four years, there's a lot of money that came out, went into bond funds and money market mutual funds as maria accurately notes sitting on the sidelines there waiting to decide what to do, and i think when people see that the bond funds are down the first quarter and the stock funds are up, for the first time in ages, that may be a major impetus. >> you also had 200 billion moving into etfs, so while it's coming out of mutual funds, it's moving into etfs, so, ralph, in terms of your best case in terms of getting exposure to this market, how do you want to do it? >> well, i love etfs. i think that's the -- probably
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the most efficient way of playing the market, like the xlf if you wanted to play financial, the xlk if you wanted to play technologies. so regardless, if it's individual stocks or -- or etfs, i think -- i think you take advantage of this market. >> and a lot of that money in etfs remember is professional money, not people who took money, and they didn't take it out of stock mutual funds and put them in stock etfs, put them in bond funds. >> in fact, i don't think the money moving into stocks is coming from bond funds. yeah, we've got a little bit of that, but really no evidence that this market has gained traction, largely coming from the sidelines and cash which is also quite interesting. you think it's going to be a buy on the dip mentality, right, ralph, so any declines you'll look for opportunities? >> absolutely, yes. i'm like with jeremy segal and i are kind of like bookends.
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he's on the fundamental economic side and i'm on the technical side. i totally agree with the man. >> he's looking for multiple expansion. >> yeah. he talks about 17,000. >> why not? not tomorrow, of course, but in the next couple of years, surely. >> what is the fly in the ointment? what are you worried about that could reverse this train? >> well, i think if our politicians really don't step up and take care of this debt crisis, i guess we could get a reaction to that. i think that's -- that would be -- >> i'll tell you what i worry about, maria. wouldn't it be funny if all these macro worries, europe and the debt crisis and the debt downgrade never happen this year and all we got was no growth at all, and that was the big worry when we got the gdp report. this is just a blip, an anomaly, but no growth is definitely a major concern that can happen this year. >> well, we're not seeing a lot of it. we're sort of 2% bumping along
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the bottom so that's certainly worth mentioning. bob, thank you. ralph, always nice to have you on the program. thanks very much. >> see you soon. in the final stretch. 20 minutes before the clebl sounds today, a market sitting at 14,000, up 145 on the dow jones industrial average. >> bulls running wild and herb greenberg says they may have just run through a red light. his warning to investors is up next. [ roasting firewood ]
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welcome back. big rally on wall street today. not everybody is buying it, that this will hold. a contrarian view right now from our own herb greenberg. herb, what's your problem? >> should not be surprised. what's the problem? look, i've always wanted to be always to say, always fun to say, it i've been around long enough. i have been around long enough to know several things. one is this stock market could power hour and make every skeptic look stupid, for now. two, do not confuse brains with a bull or bear, but in this case bull market. one of the oldestization around, but it also points to one of the biggest traps, especially when people are winning, and that trap is hubris, but as we have been pointing out quite a bit today, there's currently no shortage of charts and anyone will point to any number of
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reasons that this market may be on thin ice so let me point to two of my own. number up, amazon.com, number two. short squeezes. amazon's the story of a stock that many believe denies what generally would be regarded as logic. misses and guides below expectations, yet wall street cheers. then there are short squeezes, and we've got a market driven in part by short squeezes as i keep hearing is the case. all i do is think back to the late 1990s. bottom line. 14,000 is just a number, but it's everything happening around that number that should keep you on your toes. maria? >> you know, herb, i've got another saying that you didn't say there, got a lot ofization there, but one that you missed, you know what that is? >> don't fight the fed. >> okay. but -- >> don't fight the fed. >> therein lies part of the equation. what happens if we're doing so well in the economy, if we end up doing well in the economy borrowing gdp that interest
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rates rise? >> so who else is skeptical out there? have you talked to a lot of others who are skeptical of this rally? no doubt about it. it's been a fast and furious -- >> been a party of one. >> never a party of one. the permabear rally continues. look at this list. you've got former senator alan simpson, concerned about the quarterly quarterly impact of things. the vice chairman of blackrock, one of the most highly regarded guys and marc faber of the gloom, doom and boom report, green krenette and david rosenberg, quite a team of people, a few who have been around for quite a while. >> rosenberg is a permabear. >> faber, didn't faber tell maria this week he doesn't like it but he's still buying stocks. >> he says i'm in grave danger because i do not own gold. >> you're in grave danger. >> yes, yes. >> right. because i don't own gold? gold hasn't done much. >> but it might, according to some people.
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look, that's the part about all of this. we don't know for sure but you always have to be on your toes. i know reality and i understand reality, but i also understand that you reach this point where the spring gets sort of tightly wound. >> absolutely, and you're bringing up one of those simple things that we call fundamentals. unfortunately, some of these fundamentals haven't mattered recently. herb, thanks. check in with you again soon. coming up next, another contrarian view. he actually says a crash is coming. >> but for now we're on dow 14,000 watch. we'll bring the final minutes of trading as our special coverage continues. 14,017, picking up steam a little bit. all stations come over to mission a for a final go.
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13 minutes away from the close on this friday. the dow is trying for its first close above 14,000 since way back in 2007. you know what, maria, picked up a little momentum in the last ten minutes. >> must have been the prediction you and i made during the
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commercial break. david darst with morgan stanley is with us says get ready for higher markets and michael guyette says a correction is coming. thanks so much for joining us. michael, let me kick this off with you. you think a correction is coming. howie is veer, why, when? >> just as everybody is talking about dow 14,000 we have to be wary of dow 13,000. in the last six or seven trading days, consumers and staples outperformed the s&p. that's not consistent with the bull move. yields are rising but not commensurate with excitement in the stock market and the new bulls starting to chase because we have dow 14,000, where were they during the fiscal cliff countdown when i was on the show being very bullish. there's way too much optimism given the speed of the advance and given weakness internally in the market. >> that's a contrarian indicator. >> that being said, listen to the market themselves. the transportation index is up 9%, energy, oil up 7%, maria.
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the master limited partnerships, up 12%. >> what do they tell us? >> money is flowing in. this dow 14,000, it's a psychological indicator, okay? the united states is doing well, houses, automobile, consumer credit, the ism numbers that came out today, 53, well into expansion territory. china's numbers are looking better so you've got to listen to the markets. the markets predict the economy. the economy does not predict the markets, a little ahead of itself as michael said. michael in hebrew says liken to god and you are liken to god with your predictions. however, the markets basically are saying 54% bulls and only 24% bears. maria, you could see a pullback, but i would say right now buy on any pullback. >> it does seem like this mentality of buy on the dip, exactly what david says is going
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to basically at the end of the day carry through. you don't think so? >> look at junk debt the last three, four trading days. they have blown out. emerging market sovereign debt, emb, fallen off a cliff. a real hiccup is starting in the credit markets. that could filter through with a lag to the stock market, just as nobody -- just as everyone is getting hyper bullish. what i'm suggesting sin personally in the market there's not enough confirmation, and this could be the start of a turn. >> how is that possible though? david mentions the transports. dow theory. >> oil. >> that's a huge confirmation. dow transports, the dow relative to the industrials are at the same level they were before the october correction on a ratio basis. that suggests that a lot of good news has already been priced in. you know, yields rising are actually very negative if it's too far, too fast as it crushes the housing recovery. >> they haven't risen that fast. it's at 2%. it's been in a tight range for
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the most part in the near term. >> buy health care, buy industrials, buy technology and buy the hedge japan index. there's your japan stocks. if you take away the yen, look at, that and that's another indicator, china, japan. it's not going to be in the same problems they were last year for the time being, so the market can advance further. this is a trading range, a dating market. not a marriage market long term. >> the dxj, why would i want to buy japan where u.s. is the where the action is in. >> so much money over there, maria, that's been going into bonds, a tighter coiled spring than the united states. you've got a new regime, a new sheriff in tone and alone among major markets in the world of developed countries. they have fiscal and expansionary monetary, nobody else has both. >> in terms of the u.s., doesn't michael make a point that maybe momentum is on the side of stocks like you say but maybe we'll be able to buy stocks at
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lower levels. do i wait for a decline getting in if i've already missed this? what's going to cause the decline. if you get hiccups in the profits, that's number one but the jobs numbers, the personal income numbers, payroll numbers, they have all been good. we just revised up the half month 127, a full months of employment they are adding there. people are hiring. >> no disagreements. >> michael, david, always nice to have you on the program. thanks very much. >> we are back with the closing countdown just after this. will we or won't we close above 14,000. are you going to have to stick around to find out. plus later on our special coverage, does pimco's bill gross believe in the rally? you may be surprised by his answer. he's going to join us exclusively after the bell. you are watching cnbc, first in business worldwide. ♪ [ male announcer ] every car we build must make adrenaline pump and pulses quicken.
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you've had improvement in the economy. profits risen back to their old levels, that's the fundamental side. psychologically people are saying the united states is not washes up and valuation, 14 times earnings bloat long-term average so all three of those like the three cherries on a slot machine basically have lined up in good alignment and i think the market can go higher. >> to be honest, i don't care about the number 14,000. it's nice because it remains us we in a bullet market and back to the heady days of 2007, but the factsy want to know what happens later on in the year. what happens in the next couple of years. is this market a buy right here even after this gain that we've skene or do you want to sell into the ral? what are you seeing on the end. day in. >> short-term basis, a very strong run up and wouldn't be surprise federal there's a short pullback. >> of course. >> the united states compared to the rest of the world, the first one to go into the troubled period in '07 and the first to
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come out and best shape of any country in the world and we're getting the improvement not only here and starting to see it t in china and europe as well. a lot of upside momentum. >> best game in town, but does washington screw it up? >> given the opportunity based on history, you know what side you would have to answer that question on. the hope though is that, you know, you've got the sequester, right, coming up march 1st, kicked the can a bit on raising the debt ceiling. >> want to watch the four ps, production, politics, profits, along as profit numbers come through, the market can lift. the personal income, the jobs number and the production is the industrial expansion. this last quarter was low, but mine us 0.1% because of defense reduction. other parts of the economy are doing well, especially the
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consumer. >> let's talk about what took us here. bank of america doing very well, verizon, at&t. you had the financials and the telecom stocks as the leadership groups. merck was down 2%. exxon down. three dow stocks were actually down. what happened there and what are you seeing at the end of the kay? >> finally seeing the laggards catching up and telecoms have done okay during this period, but i think what uruguay seeing is the overall economic data with the exception of the weaker gkp number. all the other data was very strong and all the companies are pulling up with that. >> and then with that, swing it around, what happened there. dts. what happened to that today? so hyped, right, warren? >> we're right at the 14,000 line right now. the dow jones industrial average has just dipped below 14,000, so remains to be seen. we have two minutes to go here to find out if we'll close above it. if you don't have leadership or you don't have participation in technology, and